Monday, May 21, 2012

Can a poor performance review count as an “adverse action?”

For an act to be considered an “adverse employment action” sufficient to support a discrimination claim, it must constitute
”a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” Traditionally, a negative performance review does not constitute an adverse employment action, unless “the evaluation has an adverse impact on an employee’s wages or salary.” Or does it?

In Goldfaden v. Wyeth Laboratories (5/14/12) [pdf], the Sixth Circuit concluded that a warning letter issued to an employee constituted an “adverse action” even though the employee quit her job before she could suffer any consequences from the warning:

She received a warning letter in September that limited her year-end performance evaluation to a three on a scale of one to five. However, she never made it to the year-end evaluation, as she resigned three weeks after receiving the evaluation. The parties dispute what the effect of the lower evaluation would have been…. We cannot know for sure what would have happened, but there was a possibility that she would have received a lower bonus. This doubt is sufficient to survive summary judgment….

This result is even more troubling because the same opinion affirmed summary judgment for the employer on Goldfaden’s constructive discharge claim. In other words, the warning letter was not so intolerable that it compelled Goldfaden to quit, but it nevertheless could rise to the level of an adverse employment action because it could, maybe, have resulted in a lower year-end bonus.

It’s cases like this one that make it so difficult (and often frustrating) to attempt to predict outcomes for clients.